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Where Will Airline Fuel Savings Go?

Over the past year, U.S. airlines have saved over a billion dollars on jet fuel. Since it is their largest expense, some may expect that falling fuel prices will amount to less expensive air travel and improved flight experience. However, such optimistic ideas may not get far off the ground.

It’s actually projected that fares and all of those extra fees will continue to go up. Why is this the case?

“In the past six years, airlines have done a great job of adjusting the number of flights to fall just short of demand. As a result, those who want to fly will pay a premium to do so. Airlines are selling a record 85.1 percent of their domestic seats. Thanks to several mega-mergers, four big airlines control the vast majority of flights, leaving very little room for another airline to undercut fares.”

Rather than giving customers a break, airlines will be more likely to reinvest in new planes, and terminal improvements, which will likely include new computers and other technology upgrades. The past few years have already amounted to historic aviation spending with orders for 10,000 new planes being sent to Airbus and Boeing.

Are you surprised by these numbers in airline fuel savings or where that money will end up being spent? Tell us what you think in the comments.

3 thoughts on “Where Will Airline Fuel Savings Go?”

Just another way to rip the customer off, if you can give a break to the people paying the fairs when you start see a break in the amount you are spending in fuel then you cant expect the customers to continue to fly. We are going to Florida this year and we will be driving because of the amount of the rates we have to pay to fly and there is no excuse.

As families across America get ready for Thanksgiving, they may find it easier to drive to grandma’s house now that gas prices have fallen in many parts of the country. But holiday travel won’t exactly be a Black Friday bargain. Airplane ticket fares are actually up this season even as airlines save about $31 million a week on lower jet fuel prices. The way I see it, the spike in ticket prices is all about supply-and-demand. After a decade of airline mergers and industry tumult, there are simply fewer airlines and fewer seats on flights for the two million Americans who fly every day.

It doesn’t surprise me at all that instead of lowering air fare rates to boost reservation sales, they instead increase their expenditures in order to justify the increase of air fare rates. Now I hear reports that certain airplane manufacturers are planning to build windowless airplanes. This obviously will cost significantly more than what it takes to build a standard plane. I don’t think the airlines have any intention to lower the cost of air travel.